Not-for-profit hospitals likely will respond to recent consolidation among national health insurers with various merger, acquisition and growth strategies of their own in an attempt to maintain the price increases enjoyed in recent years, Moody's Investors Service said. Even before the recent rush of payer consolidation, hospitals' commercial rate increases had declined to mid-single digits from the low-teens about five years ago, Moody's said in a special comment. Softening inpatient volume and pay-for-performance initiatives are influencing hospital rate negotiations, and public reporting of hospital performance may create additional pricing pressure, the ratings agency said. Moody's said it expects hospitals to "be more prudent and methodical" -- considering local and regional deals -- after the consolidation lessons of the mid-1990s. Modern Healthcare reported on a new wave of hospital dealmaking in a July 12, 2004, cover story. -- by Cinda Becker
More hospital deals likely after health plan mergers
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